Continental: Why we want to marry the pretty girl
CHICAGO – The much talked about consolidation of the world’s airlines has finally taken off with the proposed $3.2 billion merger between United and Continental, creating the world’s biggest carrier.
The airlines must win approval from the US Justice Department’s antitrust division and also needs the backing of employee unions.
The combination of United and Continental would have 10 domestic hubs, and serve more than 144 million passengers in 59 countries.
“While there is potential for this transaction to create a truly great airline, there are also risks involved,” the unions said in a joint statement.
“We have sacrificed too much through years of concessions, furloughs, pension freezes and terminations to accept unwarranted risk, and any risk requires reward.”
Analysts expect the merger could eventually result in higher fares as the combined airline group cuts capacity.
The combined group will adopt the United Airlines name with Continental CEO Jeff Smisek heading the company.
Smisek said he heard about talks between United and US Airways, first reported on The New York Times web site, through the media. He called United’s chief executive Glenn Tilton two days later to discuss a merger.
“I recognised that United was the best partner for Continental, and I didn’t want to marry the ugly girl; I wanted to marry the pretty one,” Smisek said.
Ian Jarrett
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